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Author: nmckay Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35931  
Subject: Re: Emergency fund Date: 7/19/2004 11:40 AM
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Given that I did this a while ago, I'm not sure if it's still a good deal, but I put our e-fund into I-bonds. At the time the rates were better than a CD. They adjust for inflation, aren't taxed until you sell them (unlike EEs), and don't need to be messed with for thirty years.

There are some rules you have to adhear to such as not cashing it for six months and that if you redeem them before five years you pay a three months of interest as a penalty. Also you used to be able to do all this on line with a credit card, but I think they ended that as people were gaming the system. You also have some maximums/year to contend with.

Once the whole thing is set up, you can take your bonds down to any bank and cash them at any time the bank's open for business. That's pretty convenient.

Check www.treasurydirect.gov to make sure my facts are correct. The current rate may not be worth it, but it's another option. If it is a good deal, you could put one third there now and two thirds in ING and move another third every six months until it was all in. It should be easier than dealing with CD ladders.

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